The Schroders British Opportunities fund launched in December 2020, in the white heat of the pandemic. It was a brave moment to launch a trust focused on growth companies in the UK, but the group felt it had spotted a range of real opportunities in smaller capitalisation public and private equities. Their view hasn’t changed, even if the market has been slow to catch up.
The environment since inception has not been kind. If it seemed like sentiment towards the UK was poor in late-2020, Liz Truss’s ill-judged mini-budget proved destabilising. The small-cap sector has borne the brunt of the ongoing uncertainty around the UK economy and this trust has been in the eye of the storm. While its net asset value has been stable, the share price has widened to a significant discount (currently 28%) as sentiment has deteriorated.
See also: A year on from the mini-budget, has investor confidence in the UK been restored?
Nevertheless, there have been tentative signs of recovery, with the share price up 9% over the past three months. The peak in the interest rate cycle appears to have helped and there have been more encouraging signs on the UK economy. It has been a long haul for this part of the market, but it is plausible that we are at an inflection point.
Manager Uzo Ekwue has lived every bump in the road, having worked on the trust since inception, initially as an equity analyst and more recently as a co-portfolio manager. She works alongside Rory Bateman, co-head of investment at Schroders, and now manages the public equities side of the trust, alongside her colleague Pav Sriharan, who handles the private equity portion.
See also: Schroders rolls out alternatives fund to MPS clients
Tim Creed completes the four-strong management team on the trust. Ekwue also runs other UK equity portfolios for the group, including an all-cap fund Schroders manages for Santander Asset Management.
To read the rest of this article visit the October edition of Portfolio Adviser Magazine
